The watchdog is expected to admit its focus on customer protection and other
‘conduct of business’ issues may have been at the expense of some prudential
duties, overseeing the viability of banks’ business models, the Financial
Times reports.

The FSA has started to put through some changes, which include the
development of a new risk management team headed by risk expert Colin Lawrence.

More appointments are likely for the new team, the role of which will be to
provide expertise and support to the front-line supervisory teams and more
detailed examination of banks’ risk models.